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C O M M E R C I A L R E A L E S TAT EThe Economy … Good, and Getting BetterAcross industries and across the region, <strong>San</strong> <strong>Diego</strong> companies areexpecting increased revenues and increased employmentBy David MarinoIn reading media headlines, it’s hard to decipher if the economyis recovering, slowing or heading for a “double dip.” Part of the problembehind the headlines is that it’s an election year, and there istremendous political spin that distorts the reality of how things reallyare. Further, government economic data looks backwards in theeconomy, versus having good vision for the future. The stock marketacts impulsively in the present for short-term gains, but also isgambling on the future…more of a Vegas casino than an indicator.As a commercial real estate professional that spends every day infront of different business owners and executive management teams,I can report first-hand that the <strong>San</strong> <strong>Diego</strong> economy is good, andgetting better. My evaluation is based on more than just strong anecdotalevidence, even though that evidence in itself is consistentlypositive and optimistic.What is so powerful about the work I do, and the time in whichI engage with a company, is that I actively represent companies asthey are planning for their space needs one to three years into the future.My team and I are meeting daily with business owners, assessingtheir revenues and hiring plans, and determining their needsfor more or less space to accommodate these plans.Over the last two years, I have been reporting the square footagethat is being leased and absorbed in <strong>San</strong> <strong>Diego</strong> County, caused bythe jobs recovery, which is requiring companies lease more spaceand expand. As we look deep into the companies that we are currentlyengaged with to relocate, expand or renew their leases, thereis strong empirical evidence of continued job growth and positiveeconomic future trends.Considering all of our current active client engagements of 3,000square feet and above, of which I separated the companies into smallbusinesses (companies of under 40 employees), and large businesses(companies of over 40 employees), I found the following:Forty four percent of small businesses and 49 percent of large businessesare growing — defined as adding at least 15 percent of morespace capacity beyond what they currently occupy. Many are doingso substantially. Only 7 percent of small businesses and 9 percent oflarge businesses are downsizing, intending to lease 85 percent of thespace they currently occupy, or less. That’s a growing to downsizingratio of 6:1 for small businesses, and 5:1 for large businesses!The remainder of the companies are stable, with 49 percent ofsmall businesses and 42 percent of large businesses intending torenew their leases, or relocate to locations of comparable size. Slicedanother way, only one in 14 small businesses are downsizing, andonly one in 11 large businesses are downsizing. This isn’t the economicslowdown that some pundits are preaching. To the contrary,conditions have been improving in the <strong>San</strong> <strong>Diego</strong> economy for twoyears now, and are continuing to trend very positively for 2012 andwell into 2013.These large and small companies that we are currently workingwith primarily have leases expiring in 2013, and a few into 2014.These companies are planning and committing now to their futureintentions, and these companies are mostly making bigger bets onthe future, versus what they have in the present.Across industries, and across the region, <strong>San</strong> <strong>Diego</strong> companiesare expecting increased revenues and increased employment, andare signing on the dotted line for new leases to facilitate it. The statisticsare consistent across all submarkets of <strong>San</strong> <strong>Diego</strong> County, butmost compelling is that 70 percent of the companies we are workingwith on the I-15 Corridor are growing, as are 70 percent of thecompanies in Downtown <strong>San</strong> <strong>Diego</strong>, with particular strength in thesmall business category.I have daily conversations with CEOs and business owners whoare seeking to hire employees at all levels. Therefore, if you are readingthis and are unemployed, or under-employed, it’s time to dust offthat resume and make strong efforts to get back into the job force,as even greater times for <strong>San</strong> <strong>Diego</strong> are ahead.David Marino is principal of Hughes Marino, thelargest <strong>San</strong> <strong>Diego</strong> commercial real estate companywith brokers exclusively specializing in tenantrepresentation for lease negotiations andbuilding purchases. (619) 238-2111. Email:david@hughesmarino.com.2 7 T H A N N I V E R S A R Y 1 9 8 5 - 2 0 1 2 | J U LY 2 0 1 2 | S A N D I E G O M E T R O . C O M2 1

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